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Redcar steel plant goes into liquidation Redcar steel plant goes into liquidation
(35 minutes later)
The company that owns the Redcar steel works in the north east of England has been put into liquidation following a failed appeal to the government to help it with £800m worth of debts. The company that owns the Redcar steel works in the north-east of England has been put into liquidation following a failed appeal to the government to help it with £800m worth of debts.
Europe’s second biggest steel plant is owned from Thailand where the board of Sahaviriya Steel Industries (SSI) decided that it could no longer financially support its loss-making UK subsidiary and the 3,000 jobs that rely on it. Europe’s second biggest steel plant is owned from Thailand, where the board of Sahaviriya Steel Industries (SSI) decided that it could no longer financially support its loss-making UK subsidiary and the 3,000 jobs that rely on it.
Cornelius Louwrens, chief operating officer for SSI (UK), emailed staff in Redcar today saying he had just been told about the liquidation. Related: 'It's another kick in the teeth': Redcar steels itself for the worst
“Through the next few hours I will determine how this affects our plant operations and pleased by assured our focus remains to maintain operations at RCO (Redcar) if at all possible.” Cornelius Louwrens, chief operating officer for SSI (UK), emailed staff in Redcar on Friday saying he had just been told about the liquidation.
“Through the next few hours I will determine how this affects our plant operations and pleased be assured our focus remains to maintain operations at RCO (Redcar) if at all possible.”
SSI had appealed to the government here to help save the facility near Middlesbrough but ministers said it was an “unrealistic” demand for a blank cheque which could not be granted.SSI had appealed to the government here to help save the facility near Middlesbrough but ministers said it was an “unrealistic” demand for a blank cheque which could not be granted.
The government has however agreed an £80m package to support workers who have lost and will lose their jobs at the sprawling plant ,which has been making steel for 160 years under a raft of different companies, including for a period state-owned British Steel. The government has however agreed an £80m package to support workers who have lost and will lose their jobs at the sprawling plant which has been making steel for 160 years under a raft of different companies including, for a period, state-owned British Steel.
Sajid Javid, the business secretary, who joined a local taskforce in Redcar today, said: “This is an extremely difficult time for the workforce at SSI and the local community. The package we are announcing today will provide important support to workers and the local economy. Across government we will continue to focus on providing assistance where we can.” Sajid Javid, the business secretary, who joined a local taskforce in Redcar on Friday, said: “This is an extremely difficult time for the workforce at SSI and the local community. The package we are announcing today will provide important support to workers and the local economy. Across government we will continue to focus on providing assistance where we can.”
The government also confirmed that the company made a “last minute and unrealistic” request for the taxpayer to make an “open-ended” funding commitment to maintain the coke ovens in Redcar.The government also confirmed that the company made a “last minute and unrealistic” request for the taxpayer to make an “open-ended” funding commitment to maintain the coke ovens in Redcar.
A statement by the business department said: “The government cannot accept the request. On the basis of the limited business case it was given, the government has no confidence that this is a realistic proposal for taxpayers to support.A statement by the business department said: “The government cannot accept the request. On the basis of the limited business case it was given, the government has no confidence that this is a realistic proposal for taxpayers to support.
“In addition, it would be illegal and in breach of state aid rules. The company has never made a profit and the board’s proposal would do nothing to address the huge debts outstanding to local suppliers and other parties.”“In addition, it would be illegal and in breach of state aid rules. The company has never made a profit and the board’s proposal would do nothing to address the huge debts outstanding to local suppliers and other parties.”
The owners of Redcar announced on Monday that they planned to mothball the facility because they could no longer compete with low-cost imports from places such as China. The owners of the Redcar plant announced on Monday that they planned to mothball the facility because they could no longer compete with low-cost imports from places such as China.
They also complained that their situation was made worse by high energy costs in Britain and the soaring price of the pound against other currencies which made its exports expensive and rival imports cheaper. They also complained that their situation was made worse by high energy costs in Britain and the soaring price of the pound against other currencies, which made its exports expensive and rival imports cheaper.
Roy Rickhuss, general secretary of Community, said the liquidation was “yet further devastating news” for the workforce, their families and the community. Roy Rickhuss, general secretary of the Community union, said the liquidation was “yet further devastating news” for the workforce, their families and the community.
“We will be taking steps to ensure our members’ interests are represented through this process and putting claims forward for what they are owed.“We will be taking steps to ensure our members’ interests are represented through this process and putting claims forward for what they are owed.
“My union, Community, will establish our own taskforce of organisers, legal and education and training officers to support our members, their families and the entire community on Teesside at this extremely difficult time.”“My union, Community, will establish our own taskforce of organisers, legal and education and training officers to support our members, their families and the entire community on Teesside at this extremely difficult time.”
The £80m support package from government includes funding for workers to train at local further education colleges and to help them start up their own business but Teesside is an area of high unemployment. The £80m support package from government includes funding for workers to train at local further education colleges and to help them start their own business, but Teesside is an area of high unemployment.
The problems there are mirrored elsewhere in the UK. Steel industry leaders have warned that the whole sector and its 30,000 jobs are now threatened.The problems there are mirrored elsewhere in the UK. Steel industry leaders have warned that the whole sector and its 30,000 jobs are now threatened.
A steel summit will be held on 16 October, involving steel companies, MPs, unions and governments to discuss the future of the industry. It is understood that PwC are to be appointed as liquidators. A steel summit will be held on 16 October, involving steel companies, MPs, unions and governments to discuss the future of the industry. It is understood that PwC is to be appointed as liquidators.
Commenting on reports SSI may be going into liquidation, Gareth Stace, director of UK Steel, said: Commenting on reports SSI may be going into liquidation, Gareth Stace, director of UK Steel, said: “It may be too late for SSI, but the situation in Redcar brings the problems facing the UK steel sector into sharp relief. The government must now spearhead efforts to support the steel industry and the supply chains it feeds. The steel site in Redcar remains a viable and efficient plant and the government-led steel summit taking place in two weeks will be a make or break event for the entire industry.”
“It may be too late for SSI, but the situation in Redcar brings the problems facing the UK steel sector into sharp relief. The government must now spearhead efforts to support the steel industry and the supply chains it feeds. The steel site in Redcar remains a viable and efficient plant and the government-led steel summit taking place in two weeks will be a make or break event for the entire industry.”